I previously worked as a reporter for Business Daily, Kenya's largest business newspaper. Now I travel across Africa, helping FORBES track the richest people on the continent and telling their stories. I also chronicle the stories of successful African enterprises and the entrepreneurs behind them. Email me at mnsehe@forbes.com and follow me on Twitter @MfonobongNsehe

Africa's Entrepreneurial Challenge: If I Can't Fire You, I Can't Hire You

This is a guest post by Magatte Wade, a Senegalese serial entrepreneur and a World Economic Forum Young Global Leader

Last month the Israeli delegation sponsored a UN resolution on entrepreneurship, the first UN resolution ever devoted to entrepreneurship. It’s about time! For decades now many people have acknowledged that most job creation comes from the growth of small and medium-sized businesses (SMEs), and of course all SMEs were first entrepreneurial start-ups.

Jim Clifton, the CEO of Gallup, summarizes the major finding of the first Gallup world poll, taken in 2007: “From all Gallup’s data, which have been gathered from asking the whole world questions on virtually everything, the most profound finding is this: The primary will of the world is no longer about peace or freedom or even democracy; it is not about having a family, and it is neither about God nor about owning a home or land. The will of the world is first and foremost to have a good job.”

It is that simple: People everywhere want jobs.

Clifton goes on to acknowledge that entrepreneurs and SMEs create most jobs.

For me, it is much more personal. Every time I go back to Senegal, I’m reminded of the thousands of young people lying at the bottom of the ocean, serving as fish food. Every year thousands of young Senegalese, mostly young men, get into small fishing boats and attempt to cross the ocean to get to Spain. They go not in order to party – they go to get jobs, so they can send money back to their families. I work as an entrepreneur so that I can create jobs back home in Senegal, so that more of our young people will no longer need to take the chance of crossing the ocean in their fishing boats.

The World Bank ranks nations on the “Ease of Doing Business” annually. Senegal is ranked 166th out of 185 countries. Sixteen of the twenty nations at the bottom of the Doing Business index are African. More generally, nations in which it is easy to do business are prosperous, and those in which it is difficult are poor. Thousands of young Senegalese men become fish food every year because of excessive government regulation in Senegal.

Working in the U.S., I can create a new LLC online in 20 minutes, practically for free. In order to create a business in Senegal, it takes several days and hundreds of dollars – without bribes. I can pay that, but very few people in Senegal can afford to do that. Why is it de facto illegal (or impossible) for my fellow citizens to create a legal business?

Worse yet, once my business is open, I don’t dare hire an employee – because it is almost impossible to fire an employee in Senegal. In the U.S. I can easily try out a new employee and see if they work out or not. If not, I can explain to them that the situation is not working out and typically we can part ways amicably and simply. But in Senegal, I’m married to my employees – which means that I don’t dare hire people. Many businesses in Senegal get around the absurd labor laws by means of contracting through companies that act something like temp agencies. But that means I can’t build up a staff of loyal, committed employees. Nor could those people start a normal life (if you can’t show proof of employment, you can’t rent an apartment, build credit, get a loan…)

Senegal has unfortunately followed the French model of labor relations – in France as well it is very difficult to fire an employee. But as I like to say, “If I can’t fire you, I can’t hire you.” It really is that simple. In order to be able to build a company that provides many stable jobs, I need to be able to let employees go. Again, this is not a matter of greed or selfishness – for most small companies, it is a matter of survival. If sales are down or costs go up unexpectedly, I may have to lay off employees quickly or the business will go under.

I’m very grateful that the UN is finally recognizing the value of entrepreneurship. That said, it is important that we move beyond the romance of entrepreneurship so that we can actually begin building a world in which entrepreneurs can help solve world problems such as poverty. But in order to do so, we need to change policies, especially in poor nations, that make it much easier to do business. I’d like to see African nations become most of the top twenty on the Ease of Doing Business Index rather than the bottom twenty. And I’d like to see an upcoming generation of young Senegalese men and women have the choice to stay home and raise families rather than die at sea.

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